November 4, 2020 - MDT Pro Tips

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

Yesterday, I suggested a debit spread on MAS. The idea was to buy the $55 call for November and sell the $60 call against it. The position has a few weeks to see if the stock follows through. Risk is limited to about 1% of the portfolio.

Naturally, with the number of mail-in votes due to the pandemic, a winner in the election has not been determined. America waits for the results.

The pre-election rally continued yesterday with the S & P 500 closing 58.92 points higher.

The S & P closed the day at 3,369.16. This rally bounced back to the midband on the 60 minute chart.

The midband is 3,385.10 and yesterday's high went to 3,389.49 or about 4 points above it.

And the daily price bar closed at 62% of the range of the daily price bar. And the daily range was 52.34 points. This was less than the daily average true range, which is 61.39 points.

The support from yesterday's daily price bar should be around 3,363. Below this level, there is support around 3,352.

Pre open, the S & P is trading about 51 points higher.

This projects to an open around 3,420 or about 30 points above yesterday's high.

The projected open would be about 17 points below the major 3,437.40 level. Watch to see if the S & P can clear this level on a move higher.

On a sell off, watch the 3,405 level. This would be about the midpoint of the projected bullish gap.

The projected open would put the market above the midband on the 60 minute chart. This level is 3,385 and would now become support.

SMG reported and is trading about $8 lower.

This morning, we hear from W and ZBRA.

Today, after the close, we get earnings from QCOM and MELI.

And Thursday morning, we hear from BABA, BDX, and REGN. After the close on Thursday, we hear from BIDU and BKNG.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 41.40
Major level: 40.62
Minor level: 39.84
Minor level: 38.28
Major level: 37.50
Minor level: 36.72 **
Minor level: 35.16
Major level: 34.38 <
Minor level: 33.60
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00

The VIX closed at 35.55. The VIX closed 1.58 points lower.

This was the first close under 36.72. A close today under this level and the VIX should drop to 34.38.

The VIX closed under the upper band on the 60 minute chart. That level is now 38.90 and should be resistance. And I do expect a rally to test the upper band at some point.

The midband should be support. That level is 29.

S & P 500:

Major level: 3,593.60
Minor level: 3,554.55
Minor level: 3,476.45
Major level: 3,437.40
Minor level: 3,398.35
Minor level: 3,320.25 **
Major level: 3,281.20 <
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80

The S & P closed at 3,369.16. The S & P closed 58.92 points higher. The pre-election continued.

The market should open around 3,420. The 3,398 level should be support. Watch the major 3,437 level on the upside. If the S & P can take out this level, it would then be support.

Watch the midband on the 60 minute chart, which is 3,385.

QQQ:

Major level: 293.75
Minor level: 292.19
Minor level: 289.06
Major level: 287.50
Minor level: 285.94
Minor level: 282.81
Major level: 281.25
Minor level: 279.69
Minor level: 276.56
Major level: 275.00
Minor level: 273.44
Minor level: 270.31 **
Major level: 268.75

The QQQ closed at 274.65. The QQQ closed 4.67 higher. The QQQ did take out 275, but could not close above it.

Watch this level today.

Watch for support at the 273.44 level. And support from yesterday's daily bar should be around 273.

279 is the midband on the 60 minute chart and should be resistance. A break above it and it would become support.

IWM:

Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25
Minor level: 154.70
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75

The IWM closed at 160.24. The IWM closed 4.42 higher on the day.

At this point, the 157.81 level should be support. And a close above it and the IWM should test 162.50.

The midband on the 60 minute chart which is 155.82 and should now be support.

157 should be technical support.

TLT:

Minor level: 169.53
Major level: 168.75
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
Minor level: 158.60 **
Minor level: 157.03
Major level: 156.25

The TLT closed at 157.55. It closed .92 lower. The TLT closed just below the minor 158.60 level. Watch the 158.60 level today.

This should be resistance. And a close under today and the TLT should drop to 156.25.

158 should be technical resistance.

GLD:

Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Minor level: 183.60
Minor level: 182.03
Major level: 181.25
Minor level: 180.47
Minor level: 178.91 **
Major level: 175.00 <
Minor level: 174.25
Minor level: 172.70
Major level: 171.89

The GLD closed at 178.92. The GLD closed 1.01 higher on the day.

The GLD closed just above the 178.91 level. A close today above the 178.91 level today and the GLD should test 181.25.

The GLD is just above the midband on the 60 minute chart. That level is 178.68.

XLE:

Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.15
Major level: 34.37
Minor level: 33.59
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.90 **
Major level: 28.13 <

The XLE closed at 29.53. The XLE closed .17 lower.

If the XLE can close above 28.90 today, it should head up to 31.25.

30.36 is the midband on the 60 minute chart and should still be resistance. If the XLE can clear this level, it should head higher.

The 29.00 area should be technical support.

AAPL:

Minor level: 140.63
Major level: 137.50
Minor level: 134.38
Minor level: 128.13
Major level: 125.00
Minor level: 121.88
Minor level: 115.63
Major level: 112.50 <
Minor level: 109.13 **
Minor level: 103.13
Major level: 100.00

Apple closed at 110.44. Apple closed $1.67 higher.

By recouping the 109.13 level, Apple would still need two closes under 109.13 to drop to 100.

Apple broke under the midband on the 60 minute chart. That level is 114.50. This level should now be resistance. If Apple can clear this level, it would be support.

109 is technical support.

WATCH LIST:

Bullish Stocks: PEN, RMD, FIVN, UTHR, FFIV, XLNX, GRMN, YY, GRMN, PDD, FSLR, JD, BG, SCCO, LSCC, GO, IQ

Bearish Stocks: LMT, NOC, ULTA, BURL, LHX, GPN, CME, BA, ZBH, GD, WEX, DIS, IT, IBM, UHS, MDT, GWRE, FISV, DRI, CBOE, TRU, BAX